Getting a car loan in 2007 vs getting one in 2017

by Gopal Gidwani on April 20, 2017 · 0 comments

in Financial Planning

Until a few years ago, owning a car was a luxury. With the passage of time, people realised that it is less of a luxury and more of a necessity. With several financing options to choose from, buying a car has never been easier than now. Not only this, you can also finance the purchase of a used car, by availing a loan.

Here are some ways in which getting a car loan has changed over the years:

  1. All Types of Cars

What seemed like an unconventional market until a decade or so ago; is a booming sector of the economy today. More and more people are opting to stay up to date with technology and vehicles, and thus are willing to sell their used cars which developed a new market, not only for buyers but also for money lenders. Until a couple of years ago, no one thought of lending money for used cars. But now car loans are available not only for new cars but also pre-owned ones.

  1. Digital Applications

Availing loans today is as easy as ordering groceries online. To avail a used car loan, all you have to do is fill an online form and keep your documents – such as Aadhar card, PAN card, bank statement, etc. – ready as your age, address and identity proof. You do not even have to visit any branch to submit these documents because most lenders allow online submission or doorstep facility, making it more convenient.

  1. Hassle Free

Availing loans earlier involved a lot of paperwork, which was tedious and cumbersome. Now, loan disbursing requires a lot less paperwork and is easier for both, the lender and customer. Once you have filled the online form and have submitted all the required documents, the loan is disbursed within a few days. In addition to this, buyers are not required to provide any collateral against their loan.

  1. Flexible Repayment Options

There were times when financial institutions dictated the terms and conditions for loans. But now, banks and NBFCs offer a variety of repayment options. For instance, some lenders provide flexible EMI options which make it easier for customers to repay the loan on their cars without any financial burden.

  1. Lower Down payment

A few years ago, banks and financial institutions required customers to pay a higher amount as down payment. But now, with the growing market, companies have started to waive off most of the down payment and provide loans up to 90% of the cost of the used car and up to 100% of the cost of a new car. If you are a salaried individual who earns more than Rs. 2.5 lakhs per year or a self-employed professional who earns Rs. 2 lakhs per year, then you can avail a loan which is almost 100% of the ex-showroom price of a new car. For a used car, you can avail a loan up to 90% of the total car price.

To make it even easier on the customer; banks and financial institutions provide loans for longer tenures now. The maximum tenure for repaying a used car loan is 60 months, while a new car loan can be repaid for up to 7 years, but you can choose to pay it off earlier if you wish. This makes buying a car less of a burden for many people.

Armed with all these advantages, buying a car in 2017 is a truly a cakewalk as compared to a decade ago. It is no wonder then that the entire used car market is booming and will likely see increased sales in the years to come.

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